Case Studies:
The best way to understand how this pattern works is to study collection of charts with real life examples.
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In a simple A-B-C fractal pointing down wave C down reacts to both preceding waves A down and subsequent corrective wave B up. In fact, Wave C down directly relates to wave A down and keeps following a number of specific ratios we will study next!
Let’s review a simple example:
Wave A starts at $50 and drops to $35. Its length is $50 – $35 = $15.
Wave B starts at the bottom of wave A at $35 and pushes price up to $42.
Taking into account one of the most common projection ratio of 109.2% we can easily compute in advance a potential level where wave C may complete!
Wave C = Wave A x Projection Ratio
Wave C = ($50-$35) x 109.2% = $16.38.
Wave C starts at the top of wave B at $42.
Then it may complete at $42 – 16.38 = $25.62!
The best way to understand how this pattern works is to study collection of charts with real life examples.